Tax Type
Corporation Income Tax
Description
Protective claim; Statute of limitations
Topic
Collection of Delinquent Tax
Statute of Limitations
Date Issued
11-03-1986
November 3, 1986
Re: §58.1-1824 Protective Claim: Corporate Income Tax
§§58.1-446 Adjustment for DISC;
Dear ********************
This is in response to your letter of July 16, 1986, enclosing a protective claim for refund for the tax years 1975 and 1976. A review of the assessment shows that the additional tax was assessed on January 30, 1980. The tax was not paid until July 16, 1986, when the payment was enclosed with the protective claim.
§ 58.1-1824 of the Code of Virginia (§58-1119.1 prior to recodification) provides that: "Any person who has paid an assessment of taxes administered by the Department of Taxation may preserve his judicial remedies by filing a claim for refund with the Tax Commissioner on forms prescribed by the Department within three years of the date such tax was assessed." (Emphasis added.)
You claim that the audit was "mishandled" because there were three changes of auditors and resignations from your tax staff. Because of the alleged "mishandling" you request that the provisions of §58.1-105 be invoked to allow the filing of your protective claim.
§ 58.1-105 authorizes the department to accept an offer in compromise to settle claims of doubtful liability or doubtful collectibility. Neither situation is present in this case. In particular, there is no evidence of any conduct on the part of department personnel which could be responsible for your six and one-half year delay in paying the assessment or your failure to file a timely protective claim.
§ 58.1-1824 expressly limits the right to file a protective claim to cases in which both the filing of the claim and the payment of the assessment occurred within three years of the assessment. In view of the express statutory limitation, the department has no alternative but to reject your protective claim.
Sincerely,
W. H. Forst
Tax Commissioner
Rulings of the Tax Commissioner